Page created by Carl Black

            CHRISTY FINSEL

               JANUARY 2020
“              The mini-bank program has been an essential
                   program within our organization. Since 1996,
                     it has provided students with resources for
                        financial awareness and the tools they
                          need to build assets for their future.
                                   Angie Main, Executive Director
                           Native American Community Development Corporation

2   January 2020
Table of Contents
Introduction: The State of Native-Focused Children’s Savings Initiatives in the United States........................4

The Growing Value of Native-Focused Children’s Savings Account (CSA) Initiatives for
 Native Youth, Families, and Communities.......................................................................................................5

List of Native CSA Initiatives.............................................................................................................................6

Map with Locations of CSA Initiatives..............................................................................................................7

Native-Focused CSA Initiatives Are Generally Designed to be Culturally Relevant
 and Meet the Specific Needs of Tribal Youth..................................................................................................9

Choosing the Best Place to Hold Native-Focused CSAs: 529 College Savings Plans or
 Financial Institutions (or Both).......................................................................................................................11
     • Key Factors to Consider Related to Holding CSA Funds in 529 College Savings Plans....................11
     • Key Factors to Consider Related to Holding CSA Funds in an Account at a Financial Institution......13
     • Common Questions Regarding Choosing the Account Location of CSA Funds................................13

Potential Impacts of Owning CSAs on The Financial Aid Assessments of Native Youths..............................14
     • Table: CSA Ownership Comparisons Relating to Financial Aid Assessments....................................15

Additional Research Data on the Potential Impacts of Owning CSAs on Students’
 Financial Aid Assessments............................................................................................................................15

The Nexus Between Native CSAs and Policy-Imposed Asset Limits on Public Benefits Programs .............18

Informed Recommendations For Advancing the Development and Implementation of
  Effective Native CSA Initiatives.....................................................................................................................19

Additional Children’s Savings Initiatives Established in Native Communities That Are Comparable
 and Compatible with CSAs...........................................................................................................................26
      • Minor’s Trust Accounts & Examples....................................................................................................26
      • Youth Individual Development Account (IDA) Programs & Examples..................................................27
      • Compatibility of Various Native Savings Initiatives: The Potential Value of Connecting
        Children’s Savings Accounts to Minor Trust Accounts and Youth Individual Development
        Accounts for Developing a Lifelong “Asset Building Pipeline”............................................................29

Conclusion and a Request from the Oklahoma Native Assets Coalition, Inc.................................................30


About the Oklahoma Native Assets Coalition (ONAC)....................................................................................33

Appendix I: Native Children’s Savings Initiatives Historical Timeline.............................................................34

Appendix II: Descriptions of Nineteen (19) Currently or Previously Implemented
 Native Children’s Savings Initiatives..............................................................................................................36


               growing number of children and their families,     often designed in ways that vary from the most widely
               of all ethnicities and economic levels,            used model. Although this factor could be said to have
               throughout the United States of America,           some drawbacks, it could also serve to bolster Native-
               are able to save for developmental assets          led CSA program strength. Atypical CSA initiatives
     such as post-secondary education and job training            are often creatively designed to meet the specific
     opportunities through the institution of financial           needs of the youth they serve. Key reasons for these
     vehicles commonly referred to as Children’s Savings          variances in Native-led CSA initiatives include that:
     Accounts (CSAs). This publication focuses on providing       1) Native communities have cultural understandings
     important information related to the benefits of these       considered by their citizens to be essential towards
     types of savings accounts, and the related initiatives,      strengthening tribal communities and economies;
     for American Indian, Alaska Native, and Native               2) Native communities tend to recognize a broader
     Hawaiian youth. It also addresses the major challenges       definition of assets, and a more holistic understanding
     related to both designing effective CSA initiatives, and     of what defines “assets” for the needs of their citizens
     obtaining the resources needed to implement CSA              and communities; 3) Native communities, like many
     initiatives that seek to serve Native youth, families, and   other “communities of color,” frequently face issues
     communities. Additionally, the publication provides          related to historically-based political, structural, and
     a historical timeline for Native CSA initiatives in the      cultural barriers and inequities; 4) Native communities
     United States, and provides details about past and           often experience higher incidences of poverty
     current CSA programs serving Native youth, in hopes          and geographical isolation, including often having
     of raising awareness of the many programmatic                nominal access to legitimate financial institutions
     innovations established to date.                             (non-predatory financial businesses); and 5) Native
     CSA initiatives writ large, in various adaptations,          communities have traditionally experienced low levels
     have existed in the United States for forty-plus years.      of philanthropic giving in the United States.
     Regarding the inception of Native-led CSA initiatives,       Despite incidences of design differences with non-
     minor’s trust programs were first offered by Indian          Native CSA programs, tribal minor’s trust programs
     nations in the 1970s. The inception of Native-led CSA        and other Native-focused CSA initiatives have been
     initiatives that align more closely with models now          around long enough to have acquired a considerable
     widely accepted as part of the current mainstream            amount of knowledge about their programs that could
     CSA movement could be traced to a “mini-bank” CSA
                                                                  be used to inform and provide important lessons for
     program initiated in 1996, by the Native American
                                                                  the wider CSA field. As mentioned above, Native CSA
     Community Development Corporation (Montana).
                                                                  programs have gained helpful knowledge related to
     Currently, a variety of Native-led CSA initiatives serve
                                                                  some effective innovations in CSA program design,
     a number of American Indian and Native Hawaiian
                                                                  development, implementation, and administration
                                                                  — these innovations often being achieved under
     One benefit of shedding new light on existing                uniquely challenging circumstances. The lessons
     Native CSA initiatives is the sharing of the increased       learned by Native programs could be used to inform
     knowledge resulting from the development and                 current and future CSA efforts by tribes, nonprofits,
     implementation of such a number of Native CSA                and governments — at the tribal, municipal, state, and
     programs over time. These Native-led CSA programs            federal levels. Unfortunately, existing data on CSA
     generally have goals related to the unique needs and         initiatives focused on Native populations are often
     aspirations of youths in Native communities. Hopefully,      omitted from, or only lightly examined and addressed,
     gaining increased knowledge of Native CSA programs           in broad, more mainstream-focused, research efforts.
     will also serve as a timely reminder to both the asset-      A growing number of Native researchers, nonprofits,
     building field and the nation as a whole that diversity      and advocacy groups are dedicated to alleviating this
     and program innovation can coexist successfully in the       research deficiency. Towards this effort, the author
     account structure, program design, implementation,           hopes that this paper will be used to illuminate both the
     and administration of CSA initiatives.                       state of Native-focused CSA programs across the nation
     Native-led CSA initiatives in the United States are          and the lessons learned from those initiatives to date.

4   January 2020
As of 2019, there are at least nineteen known federally                               Blackfeet Reservation since 1996; the Cherokee Nation
recognized Indian Nations and Native-led nonprofits                                   Commerce Group (Oklahoma) started a CSA pilot
that either have or are administering Native children’s                               program in 2005 (now completed); the White Earth
savings initiatives.1 A map and list of all previous and                              Investment Initiative (Minnesota) started an at-birth
current Native CSA initiatives is included at the end                                 savings account program in 2007; and the University
of this section, with a development timeline of the                                   of Hawai‘i at Mānoa and the Hawai‘i Alliance for
initiatives included in Appendix I, and a more detailed                               Community-Based Economic Development (HACBED)
description of each of the initiatives included in                                    (Hawai‘i) started a Kids’ Saving Initiative in 2008.2 Over
Appendix II. In addition to CSAs, two other significant                               the years, Native asset building practitioners have
youth asset building savings initiatives (minor’s trust                               implemented a variety of innovative CSA program
accounts and youth Individual Development Accounts,                                   models and have learned a number of valuable lessons
or IDAs) have been initiated by tribal communities                                    that they are willing to share. As aforementioned, more
and Native-led nonprofits, and are designed in a way                                  information about the development timing of Native
that is considered by some in tribal communities to                                   CSA initiatives may be found in the historical timeline in
be important pieces of a larger body of effective child                               Appendix I.
savings initiatives in Native communities. General                                    The following list and map may be used to
descriptions of these initiatives, and some examples,                                 geographically pinpoint known Native CSA initiatives,
are also included in this paper.                                                      and is complete to the best of the author’s knowledge
Depending on the initiative, both Native and non-Native                               (although the list should not be assumed to be
children’s savings account administrators may refer                                   exhaustive). Lessons learned from these initiatives
to their initiatives, programs, or plans as Children’s                                were used extensively to inform this paper. See the
Savings Accounts (CSAs), Children’s Development                                       acknowledgments at the end of the paper for a listing
Accounts (CDAs), Youth Savings Accounts (YSAs),                                       of Native CSA program administrators and associates
Kid’s Savings Initiatives, or other similar names. The                                who offered valuable knowledge to the author for
author’s use of the various terms listed above is based                               (and approval of) the descriptions the nineteen known
on how Native-focused program administrators have                                     programs found in Appendix II. (See the list and map of
labeled their particular initiatives and is interchangeable                           the nineteen known Native children’s savings initiatives
with “CSAs.” Regardless of how these initiatives are                                  on pages 6 and 7).
named, the goals of Native-led CSA initiatives are to
help Native youth create a nest egg of savings, develop                               THE GROWING VALUE OF NATIVE-FOCUSED
financial capability, and cultivate an asset building                                 CHILDREN’S SAVINGS ACCOUNT (CSA)
mindset — through initiatives that are also designed to                               INITIATIVES FOR NATIVE YOUTH, FAMILIES,
be relevant to the youth’s cultural and social context                                AND COMMUNITIES
and experience.                                                                       Native CSAs provide a variety of benefits to youth,
While fifteen of the nineteen Native children’s savings                               families and communities. Native CSAs assist youth
initiatives documented in this paper were launched                                    in accessing mainstream asset building accounts at
within the past nine years (2011 to 2019), other                                      banks or credit unions, strengthening savings habits,
children’s savings programs specifically serving Native                               and creating a nest egg of savings for a variety of
youth go back to the 1970s when tribes first started                                  current and future development purposes. For Native
offering tribal minor’s trust programs. Of the Native                                 children, personal development might include expenses
CSA programs that are designed in a similar way to                                    related to tribal customs and functions, such as artistic
the current mainstream CSA movement, the Native                                       initiatives, traditional food and land preservation
American Community Development Corporation                                            efforts, and participation in powwows, reunions, and
(Montana) has a twenty-four year track record with                                    potlatches. Additionally, such accounts, depending
their mini-bank program — serving youth on the                                        upon how they are structured, can help youth and their

 The author used personal knowledge of these programs to reach out to Native children’s savings initiatives. She also asked professional contacts for
any information related to Native children’s savings initiatives that might exist outside of her personal knowledge. Mrs. Finsel also spoke with a number of
administrators of Native asset building initiatives other than CSAs (such as Individual Development Account administrators), to see if they were also offering
children’s savings accounts as part of their programs. The author counted as one program, an initiative administered and funded by the Oklahoma Native Assets
Coalition, Inc. (ONAC), that has twenty-one tribal and Native-led nonprofit outreach partners, as one initiative in this paper (while including descriptions of all the
partner contributions to that program).
 This historical information is based on communications with Angie Main, Native American Community Development Corporation Executive Director; Shay
Stanfill, Cherokee Nation Small Business Assistance Center Director; Sarah Castro, Midwest Minnesota Community Development Corporation/White Earth
Investment Initiative Development Services Coordinator; Dr. Michael Cheang, Associate Professor, Department of Family and Consumer Sciences, Hawai‘i at
Mānoa; and Brent Kakesako, Executive Director of HACBED, October 2016.

List of Native Children’s Savings Initiatives
                                 (Numbers correspond to the map on the opposite page.)

     1. Native American Community Development Corp., Blackfeet Mini-Bank Program
     2. Cherokee Nation SEED Program
     3. White Earth Investment Initiative’s Children’s Trust Fund
     4. The University of Hawai‘i at Mānoa and the Hawai‘i Alliance for Community Based Economic Development
        Kids’ Saving Initiative
     5. Lakota Funds Child Development Account Program
     6. First Nations Development Institute, Bureau of Indian Education School at Wingate High School, and
        Gallup Catholic High School Pilot Program
     7. Sequoyah Fund Kituwah Savings Program (*M)
     8. Hawai‘i Alliance for Community Based Economic Dev., and Kōkua Kalihi Valley Youth Savings Initiative
     9. Oklahoma Native Assets Coalition, Inc. (ONAC) Children’s Savings Account Program*
     		     • Mvskoke Loan Fund (*AOP)
     		     • Eastern Shawnee Tribe of Oklahoma (*AOP)
     		     • Osage Financial Resources, Inc. (*AOP)
     		     • Cherokee Nation Child Support Services (*AOP)
     		     • BeLieving In Native Generations (BLING) (*AOP)
     		     • American Indian Resource Center, Inc. (*AOP)
     		     • Scholarship Foundation Program of the Muscogee (Creek) Nation (*AOP)
     		     • Pawnee Tribe Title VI Elderly Meals Program (*AOP)
     		     • Citizen Potawatomi Community Development Corporation (*AOP)
     		     • Ponca Tribe Head Start (*AOP)
     		     • Housing Authority of the Seminole Nation (*AOP)
     		     • Osage Nation Financial Assistance Department (*AOP)
     		     • Modoc Tribe of Oklahoma, Housing Authority (*AOP)
     		     • Housing Authority of the Peoria Tribe of Indians of Oklahoma (*AOP)
     		     • Wyandotte Nation (*AOP)
     		     • Absentee Shawnee Housing Authority (*AOP)
     10. Wichita and Affiliated Tribes (*M/AOP)
     11. United Keetoowah Band of Cherokee Indians (*M)
     12. Kaw Nation (*M)
     13. Ranch Good Days, Inc. (*M)
     14. Kiowa Tribe (*M/AOP)
     15. First Nations Development Institute and Gallup Central High School Pilot Program
     16. Chief Dull Knife College Financial Savvy Program (*M)
     17. NAT$VE in the BANK Initiative
     18. Kathryn M. Buder Center for American Indian Studies at Washington University in Saint Louis
         and American Heritage Bank Youth Savings Account Opening Project
     19. Hawaiian Community Assets Youth Match Account Program

        * ONAC = (M = ONAC-Funded Children’s Savings Initiative Mini-Grant Awardee) (AOP = Account Opening Partner)
          (M/AOP = Both ONAC-Funded Children’s Savings Initiative Mini-Grant Awardee and Account Opening Partner)

6   January 2020
Native Children’s Savings Initiatives




                                         6, 15                                     18
Additionally, across
                                                             14                     2, 11
the nation, there are
an estimated
sixty-five minor’s                                                 10
trust funds provided                                           9 (statewide with
by tribes, from their                                          21 partners plus
                                                              nationwide support
gaming revenue.                                                  of 2 grantees)
There are also at least
twenty-three Native
youth Individual
Account (IDA)
programs (completed
pilots and active                                                             4 (statewide), 8,1919 (statewide)

                                                      (c) Christy Finsel 2020

                                The numbers on this map correspond
                              to the list of initiatives on the facing page.

               For more information, or to contribute additional information on CSA experiences in
          Native communities (particularly information related to CSA initiatives that may have been
              unintentionally omitted), please contact Christy Finsel at

families to pay for school clothes, medical and extra-                              regarding college attendance and completion. With
     curricular expenses, and for other savings goals of the                             new and more optimistic outlooks about future goals,
     child’s choice.                                                                     Native youths’ aspirations towards future employment
     The goal of acquiring a post-secondary education                                    options might also be impacted in a positive way.
     is a key priority for many Native families. Given the                               There are additional ways that CSAs may benefit Native
     need for funding for college and trade school, seven                                communities: based on early research findings related
     of the nineteen Native CSA initiatives detailed in this                             to their SEED for Oklahoma Kids (SEED OK) policy
     publication have required that youths save for higher                               test, the Center for Social Development at Washington
     education through their CSAs. A focus on education                                  University in St. Louis has reported that Child
     will hopefully address the college graduation gap for                               Development Accounts (CDAs) in the Oklahoma SEED
     tribal citizens. As of 2018, according to the American                              initiative “improved mothers’ expectations for their
     Indian College Fund, only 14 percent of American                                    children’s education” and “improved disadvantaged
     Indians have a bachelor’s degree.3 As of 2015, for                                  children’s early social-emotional development” among
     Native Hawaiians, 25 years or older, living in the State                            other positive findings.7
     of Hawai’i, only 11.6 percent have a bachelor’s degree                              CSAs have become a proven way to offer assistance
     and only 4.8 percent have a graduate or professional                                to families, in general, for starting to save for post-
     degree.4 While there are a variety of college                                       secondary education costs. However, CSAs could
     scholarships available for secondary school students                                help tribal citizens, in particular, to better manage
     across the United States (including a significant                                   “expectations” about who is going to pay for
     number of Native students through their tribes), we                                 education-related costs. According to data from a 2017
     find, anecdotally, that available scholarships are not                              report from the FINRA Investor Education Foundation
     always applied for by Native youth and their families                               and First Nations Development Institute, 32 percent
     due to a belief that college is not truly an option for                             of American Indian and Alaska Native respondents
     them.5                                                                              reported that they, themselves, were not setting aside
     In research published by the Children And Youth                                     money for their children’s college education.8 This
     Services Review in March 2013, researchers found that                               represents the lowest college savings rate across all
     “A low- and moderate-income child who has school                                    major U. S. populations. (See the footnotes below for
     savings of $1 to $499 prior to reaching college age is                              additional information).
     over three times more likely to enroll in college and four                          Anecdotally, several tribal representatives in Oklahoma
     times more likely to graduate from college than a child                             have told the Oklahoma Native Assets Coalition, Inc.
     with no savings account.”6 It is hoped that opening                                 (ONAC) that they hear from tribal citizens about how
     and funding college savings accounts for Native youth                               many families assume their tribe will help pay for their
     may reduce the aforementioned “graduation gap” and                                  children to attend college — which is not often the
     change tribal youths’ aspirations and expectations                                  case. With the higher costs of college tuition, and

     American Indian College Fund. American Indian College Fund: Education Is the Answer. 2018. Accessed October 19, 2018, at

      OHA Native Hawaiian Data Book 2015 - Table 4.51 Update (Educational Attainment of Native Hawaiians in the United States and Hawai‘i: 2014). http://
     Personal communications between author and tribal program directors.

     Elliott, W., III, Song, H-a, and Nam, I. (2013). Small-dollar children’s saving accounts and children’s college outcomes by income level. Children & Youth Services

     Review, 35(3), 560–571. doi:10.1016/j.childyouth.2012.12.003.
      Beverly, S., Clancy, M. and Sherraden, M. (2016). The Early Positive Impacts of Child Development Accounts. CSD Research Brief 15-08. Available at https:// See also Huang, J., Beverly, S.G., Kim, Y., Clancy, M.M., & Sherraden, M. (2019, October). Financially Vulnerable Families Reap Multiple
     Benefits from Child Development Accounts. CSD Research Brief 19-40. Available at
      Dewees, S., and Mottola, G. (2017). Race and Financial Capability in America: Understanding major U. S. populations. Available at http://www. According to a September 26, 2017, email communication between the author
     and Sarah Dewees, formerly of First Nations Development Institute, to better understand this data, it is helpful to note that “earlier research has documented
     high levels of financial distress for AI/AN people-in fact, in some regions of the country, AI/AN are by far the poorest population groups (U.S. Census) (November
     2015).American Indian and Alaska Native heritage month: Profile America facts. CB15-FF.22. AI/AN women (especially those with dependent children) are more
     likely to experience higher poverty rates than AI/AN men (Eichner, A., & Gallagher Robbins, K. (2015). National snapshot: Poverty Among Women and Families,
     2014. Washington, DC: National Women’s Law Center). Previous research suggests that AI/AN people are less likely to have intergenerational role models and
     are less likely to be exposed to financial concepts, or economic socialization, due to higher levels of intergenerational poverty (See Dewees, S. and Mottola,
     G. (2017). Race and Financial Capability in America: Understanding the Native American Experience. FINRA Foundation Issue Brief. See also Anderson, W.,
     Brantmeier, N., Jorgensen, M., & Lounsberg, A. (2010). Financial education in South Dakota schools with high Native-enrollment: Barriers and possibilities.
     Longmont, CO: First Nations Oweesta Corporation). This previous research suggests that as a result, fewer Native American families have resources to save for
     educational expenses. In addition, financial knowledge for many AI/AN people is lower than the national average.”

8   January 2020
some tribes serving growing tribal youth populations                                     middle school years, while also assisting them
totaling between several hundred to well over 20,000                                     to save for college costs; to promote the idea
youths, per tribe, many tribes are looking towards a                                     with children and their families that college is an
supplementation strategy; assisting their citizens in                                    option.
utilizing a more viable way to save for their children’s                                 Expanded Financial Literacy Objectives — As
education, including participation in a children’s                                       with the broader field of CSA initiatives, Native
savings initiative.                                                                      children’s savings practitioners frequently
                                                                                         provide some type of financial education, as
                                                                                         part of their program, to enhance the financial
GENERALLY DESIGNED TO BE CULTURALLY                                                      literacy and capability of their participants.
RELEVANT AND MEET THE SPECIFIC NEEDS                                                     Some Native-led programs use Native-specific
OF TRIBAL YOUTH                                                                          financial education materials that they, or other
Native children’s savings programs are designed to                                       Native-focused entities, have created, making
address specific needs of both their youth and their                                     the information more specific to and relatable
local community or nation. Such customization seems                                      with their target audience. For example, at
necessary, since the 574 federally recognized tribes,                                    CSA account opening events, ONAC provides
plus state recognized tribes, and Native Hawaiian                                        basic Native-specific financial education for
communities, are diverse in location, customs, and                                       the youth, while also distributing investor
beliefs.9 Culturally relevant programs have been shown,                                  education booklets to the parents that include
in general, to increase Native community buy-in.                                         important information about how to manage a
Definitions of assets and consensus on effective ways                                    529 college savings account. ONAC also hosts
to use assets in these communities is also diverse. As                                   Native-specific financial education train-the-
with many CSA initiatives, program design features                                       trainers for its tribal and Native-led nonprofit
for tribal initiatives may vary according to the goals of                                partners so that they, in turn, may offer financial
program leaders and partners, target markets, funders,                                   education and credit counseling to adult tribal
length of savings and program duration, and the                                          citizens (such as the parents completing CSA
specific asset building goals of youths served. Native                                   applications for their children).
CSA program design flexibility includes:                                                 Connecting CSAs to Both Banking Access
       Varied Savings Goals — Seven of the nineteen                                      and 529 Savings Plans, Often in Culturally
       Native CSA programs were created expressly                                        Relative Ways —Through these programs,
       to assist youths in saving for education                                          Native youth and their parents or guardians,
       expenses, while the other twelve programs                                         who previously may not have had any
       allow participants to choose their savings goals.                                 experience with financial institutions (or few
       Given the poverty that the families they serve                                    positive experiences), are being encouraged
       are experiencing, one of the CSA programs —                                       to connect with both mainstream financial
       administered by Lakota Funds (South Dakota)                                       institutions (banks or credit unions), or college
       — also allows participants to save for both                                       and trade school savings vehicles (such as
       short- and long-term goals. Lakota Funds                                          a 529 savings plan), while still appreciating
       assists Native youth and their families to save                                   and maintaining their own cultural heritage of
       for both current necessary asset purchases                                        saving and investing.11 The Native American
       (school clothes for elementary school) and                                        Community Development Corporation Blackfeet
       future goal purchases (saving for college).10                                     Mini-Bank Program (Montana) has successfully
       Such a program design option can provide                                          facilitated “mini-bank” learning opportunities
       the needed resources to successfully support                                      through their savings programs.12 This process
       Native children through their elementary and                                      of connecting cultural practices to modern

 Finally! At long last, Little Shell get federal recognition. December 20, 2019. Retrieved from
little-shell-tribe-chippewa-indians-federal-recognition/2439763001/. See also:
    Garcia-Clifford, Yolanda. Personal communication. 23 September 2016.
  According to Questions and Answers provided by the IRS, 529 plans were created by Congress in 1996 and are “named after section 529 of the Internal
Revenue Code.” A 529 plan is “a plan operated by a state or educational institution, with tax advantages and potentially other incentives to make it easier to save
for college and other post-secondary training for a designated beneficiary, such as a child or grandchild.” Internal Revenue Service. 529 Plans: Questions and
Answers. August 11, 2016.
    Main, Angie. Personal communication. 21 September 2016.

banking practices encourages Native youth                                       counseling, and workforce development. The
          and their families to find asset-building synergy                               targeted adults may access a variety of asset
          between two cultures.                                                           building tools when they open CSAs for their
          In 2015, as a means of looking for ways to                                      children.
          incentivize accounts that could be integrated                                   Opening Accounts for All Youths in the
          with other supports offered to the adults in the                                Family — Tribal citizens highly value family
          families they serve, the Hawai‘i Alliance for                                   and communal assets as well as individual
          Community-Based Economic Development                                            assets. Thus, when funding is available, at the
          (HACBED, serving Native Hawaiians in                                            CSA account opening events hosted by ONAC
          Hawai‘i) joined with the County of Hawai‘i                                      and its twenty-one tribal and Native-nonprofit
          Office of Housing & Community Development                                       program outreach partners, ONAC funds
          to implement an incentivized saving initiative                                  accounts for all the youth in the families served,
          where they offered a direct deposit program for                                 even if the invitation to participate was made
          participants of the Housing Choice Voucher and                                  to the child in the family who, for example,
          Tenant Based Rental Assistance program. This                                    attends a tribal Head Start program. Parents
          was a Bank On 2.0 Pilot for Hawai‘i County.                                     have expressed a desire for all of their children
          In 2019, ONAC launched a Native Bank On                                         to have access to a CSA, and for them to think
          initiative to help Native families in Oklahoma                                  more positively about graduating from college.
          (and eventually beyond Oklahoma) to connect                                     ONAC funds CSAs for additional children in
          to safe and affordable transactional bank                                       participating families, up to age twenty-two.
          accounts. In 2020, ONAC will work to connect                                    Establishing and Expressing A Broad
          financial institutions that offer Bank On certified                             Articulation of Assets Through CSAs —
          accounts (no overdraft fees, transparent                                        Tribes and Native-led nonprofits continue to
          monthly fees, and a maximum opening account                                     communicate and define, with their tribal youth,
          deposit of $25 per account) with several ONAC                                   the connections between the various kinds
          tribal CSA partners and program participants                                    of assets that are important for building and
          for opening accounts at CSA events. If Native                                   maintaining prosperous tribal communities.
          CSA programs are choosing a financial                                           Related to current Native-focused children’s
          institution to hold the CSAs, they could request                                savings programs, the financial education
          assistance from ONAC to find Bank On certified                                  materials utilized by a number of tribal
          account options in their geographic area.                                       advocacy entities such as First Nations
          In addition to some Native CSA programs                                         Development Institute (FNDI) (National), the
          supporting greater Native banking access,                                       Oklahoma Native Assets Coalition, Inc. (ONAC)
          other Native CSA programs that utilize 529                                      (National), Hawai‘i Alliance for Community-
          savings plans are often introducing Native                                      Based Economic Development (HACBED)
          families to these types of invested accounts to                                 (Hawai‘i), Lakota Funds (South Dakota),
          help them build their assets.                                                   White Earth Investment Initiative (Minnesota),
          Linking CSAs to Integrated and Multi-                                           Sequoyah Fund, Inc. (North Carolina), Chief
          Generational Approaches to Asset Building                                       Dull Knife College (Montana), and Hawaiian
          — In addition to CSAs, at least seven of the                                    Community Assets (Hawai‘i), promote a broad
          Native CSA programs mentioned in this paper                                     and traditional concept and understanding of
          also promote asset-building programs geared                                     Native assets.13
          to adults in the families. The additional asset-                                For example, at CSA account opening
          building programs and services offered vary per                                 events ONAC (as is typical with many other
          tribe, or Native-led nonprofit, and may include:                                Native CSA programs) recognizes a generally
          Bank On, Voluntary Income Tax Assistance,                                       accepted tribal concept that Native assets
          small business development services, family                                     are understood to be more than money or
          Emergency Savings Accounts, loan programs,                                      monetary investments. ONAC affirms that
          adult Individual Development Accounts                                           Native assets include other types of saving
          (IDAs), down payment assistance, homebuyer                                      and investments, such as learning and
          education, foreclosure prevention, credit                                       preserving Native language, strengthening

      Sherry Salway Black, formerly of FNDI, articulated such an understanding of Native assets in 1994. See Salway Black, S. Redefining Success in Community

     Development: A New Approach for Determining and Measuring the Impact of Development. Medford, MA: Tufts University, 1994.

10   January 2020
tribal sovereignty, engaging in many forms of                                   CHOOSING THE BEST PLACE TO HOLD
     education, and establishing food security — as                                  NATIVE-FOCUSED CSAS: 529 SAVINGS PLANS
     well as reclaiming and utilizing land, building                                 OR FINANCIAL INSTITUTIONS (OR BOTH)
     homes on Native lands, and establishing
                                                                                     Sovereign nations, Native-led nonprofits, and Native
     Native-owned businesses.14 ONAC recognizes                                      asset-building coalitions choosing to design and
     these Native principles at CSA account opening                                  implement CSA programs face the decision of whether
     events. These events include an ONAC-funded                                     to hold the accounts in 529 savings plans or in local
     Native arts project, where youths participate in                                financial institutions. Depending upon the goals of
     a discussion of assets they think are of value                                  the programs, factors such as the asset needs of
     to their family and community. The discussion                                   youth in their communities, various state asset limit
     is followed by encouragement for them to                                        requirements for means-tested programs, funder
     illustrate the assets they value and, if possible,                              requirements, and restrictions imposed by other
     to hear from a local Native artist about the                                    initiative partners, must be considered as program
     value placed in traditional artwork by Native                                   administrators determine which financial vehicle would
     communities. At many of the same account                                        be best for holding their particular CSA accounts.
     opening events, ONAC also gives the youth                                       Native CSA administrators could explore offering both
     organic seed packets to illustrate the asset                                    options: a shorter-term savings option where youth
     building value of promoting food cultivation                                    save money for immediate needs in a traditional bank
     and food sovereignty. Over several years, with                                  or credit union account, and a longer-term savings
     parental permissions, ONAC has created desk                                     option for such assets as post-secondary education
     calendars, using artwork by Native youths who                                   expenses, achieved through financial vehicles such as
     opened CSAs, for use in promoting additional                                    529 savings plan accounts. The following information
     discussions about Native asset building with                                    might be of assistance when considering the type of
     the youth throughout the year.                                                  savings vehicle that best serve Native-focused CSA
     Another example of this same line of approach                                   programs.
     comes from HACBED, in Hawai‘i. They based                                       Key Factors to Consider Related to Holding CSA
     their children’s savings initiatives on an asset                                Funds in 529 College Savings Plans
     policy framework that notes “wealth is more                                          Funds held in 529 college savings plan
     than the accumulation of money and goods —                                           accounts can be used only for policy
     it [also] relates to ‘ohana, [which is] ‘the quality                                 approved educational expenses. 529 college
     of our relationships, the resilience that comes                                      savings plan accounts are intended to be
     through the support of community networks,                                           used for policy mandated “qualified” tuition
     and our ability to share and leave a legacy                                          and educational expenses at accredited
     for future generations.’” HACBED also notes,                                         colleges and trade schools or private or
     “For island families and communities, wealth                                         religious elementary and secondary schools.
     is also rooted in the concept of ho‘owaiwai (to                                      Additionally, the newer Setting Every
     enrich) — the time tested indigenous wisdom of                                       Community Up for Retirement (SECURE) Act
     Native Hawaiians that to be, thrive, and prosper                                     (passed at the federal level on December 20,
     in these islands, we must hold sacred our                                            2019) allows for certain changes to the federal
     interrelationship and interdependence with ‘āina                                    tax treatment of qualified education loans and
     (that which feeds us).”15 This culturally relevant                                   apprenticeships. This means that 529 account
     approach to an understanding of assets and the                                       owners will not have to pay federal tax on 529
     various asset building frameworks for Native                                         withdrawals for such expenses. (As of January
     peoples has significantly impacted current                                           2020, 529 boards are reviewing how their state
     approaches by Native communities towards                                             laws might currently align, or not align, with
     the development of Native children’s savings                                         these federal legislation changes; requiring
     initiatives.                                                                         CSA program administrators to monitor state

 Finsel, C. ONAC Children’s Savings Account Activity Booklet, 2015. In the Native asset building field, earlier articulations of an asset building framework are

attributed to Sherry Salway Black, previously with First Nations Development Institute; First Nations’ Building Native Communities: Financial Skills for Families
curriculum; and research conducted through the Kathryn M. Buder Center for American Indian Studies and Center for Social Development at Washington
University in Saint Louis.
 Hawai‘i Alliance for Community-Based Economic Development. Hawai‘i Island Kids Saving Initiative: A Pathway to Family Financial Empowerment, p. 5. July


tax treatment of 529 funds for apprenticeships                                      beneficiary’s qualified educational expenses
          and student loan repayments).16 In terms                                            come out federally tax-free.
          of tax treatment, qualified expenses at the                                         Significantly, for many of the parents or legal
          federal level now include tuition, room and                                         guardians of Native youth, opening a children’s
          board (with limitations), fees, books, supplies,                                    savings account is the first opportunity they
          and equipment required for the enrollment or                                        have had to hear about the benefits of 529
          class attendance costs of a beneficiary at an                                       college savings plans — or how to connect to
          accredited university, college, apprenticeship,                                     such plans.
          and vocational programs. Computers,
          internet access fees, printers, and software                                        Funds held in 529 savings accounts have
          are considered allowed expenses, along with                                         no time restrictions for use and can be
          educational expenses directly related to those                                      transferred to another family member. If
          students with special needs.17 Non-qualified                                        a young adult decides that college or trade
          withdrawals are subject to taxes. Research                                          school is not for them, they may keep the
          indicates that CSA programs (Native and non-                                        funds in their account for use when they are
          Native-led) often utilize 529 savings plans,                                        older (there is no expiration date on the funds).
          considering them an effective way to hold                                           Also, the beneficiary of the account (the youth)
          deposits over time, with higher potential for                                       could decide to later transfer the funds to
          savings growth.                                                                     another qualified beneficiary such as their
                                                                                              own children or another family member for
          CSAs opened in a 529 college savings plan                                           approved uses of the account funds without
          offer specific benefits to account holders.                                         incurring taxes or penalty.20 If a student does
          Benefits offered include: certain tax benefits                                      not use all their funds for undergraduate study,
          related to both deposits and interest earned                                        they can save the funds for future or graduate
          on account growth (if the account holder has                                        school expenses. Beneficiaries that attend
          a federal and/or state tax liability); assistance                                   military academies or receive full scholarships,
          in connecting account holders to mainstream                                         having no need for the funds in their 529
          colleges and trade schools; and allowing                                            account, may withdraw certain amounts from
          account holders to receive account statements                                       the accounts that would not be subject to the
          and access their account information online.                                        10% penalty, although they would pay taxes on
          For those Native parents who pay state                                              the earnings portion of the withdrawal.21 Also,
          taxes, they may get additional tax benefits                                         as of December 20, 2019, the SECURE Act
          for contributions made to 529 accounts, and                                         changed the federal tax treatment of student
          receive a tax exemption on the funds used for                                       loan repayment at the federal level so that any
          approved purposes.18 All tribal members do not                                      of the beneficiary’s siblings could use 529 funds
          pay state taxes, and so any state tax benefit                                       to repay up to $10,000 of their student loans.22
          may or may not be relevant to them as Native                                        Currently, at the state level, various 529 college
          CSA program participants.19 Contributions                                           savings plans are reviewing these federal
          made to 529 plans are not deductible on federal                                     changes with their boards and state attorneys
          tax returns, but 529 investment earnings grow                                       to determine how these changes at the federal
          tax-deferred. Distributions used to pay for the                                     level might impact state tax deductions and if

       See Also, see Setting Every Community Up for Retirement (SECURE) Act, Sec. 302. Expansion of Section 529 Plans
     (p. 642).

      See each 529 plan for more information. As an example, here are the tax benefits associated with the Oklahoma 529 Savings Plan for Oklahoma residents:
       As an example, one of the Native CSA programs in this publication, Chief Dull Knife College and the People’s Partner for Community Development, notes that
     a number of their student parents do not pay Montana state taxes. (If Northern Cheyenne tribal members earn all their income on the Northern Cheyenne Indian
     Reservation, then they are not required to pay state taxes — and the same applies to students who have tribal membership with other tribes if they reside on
     their own tribe’s reservation land).
      See each 529 plan for more information. The information may be found under FAQ related to changing the beneficiary.

      See and
     21 While the SECURE Act was recently passed, and changes may be

     made to the law, based on the article noted above and federal tax treatment of student loan repayment, the author currently understands that if you have a family
     with five children, and one of the children (a 529 account beneficiary) does not use $40,000 of their 529 funds in their 529 account, the account owner (a parent)
     could work with their 529 plan administrator to take $40,000 in 529 distributions to pay up to $10,000 in student loan payments for each of their other children.

12   January 2020
distributions for loan repayment would qualify                                     their own use, could the administering agency
     at the state level based on their state statutes.23                                control the funds in the accounts? Yes, if
Key Factors to Consider Related to Holding CSA                                          CSA funds are held in a 529 college savings
Funds in an Account at a Financial Institution                                          plan account that an agency has ownership of
                                                                                        (instead of a parent-owned account), program
     Funds held in a regular savings account                                            administrators (rather than parents) control
     at a bank or other financial institution may                                       the funds in that account. Also, if CSA funds
     be used for any goals or uses the program                                          are held in custodial accounts in a regular
     determines eligible. If accounts are held in a                                     savings account at a financial institution, with
     financial institution, such as a bank or credit                                    the administrating agency as the custodian
     union, Native CSA program administrators                                           on the account, the administrator controls any
     may determine the specific asset goals and                                         withdrawals of the funds.
     purchases Native youths may make with their
     CSA funds — such as other school-related                                           When tribes or Native nonprofits choose to
     expenses which are not allowed to be covered                                       administer the accounts and control the use
     by a 529 savings plan, or whatever other type                                      of the funds, they face the responsibility of
     of asset purchase they choose — without                                            administering the funds for the lifetime of the
     savers incurring penalties.                                                        accounts (possibly up to twenty-two years
                                                                                        or more if accounts are opened for infants
     Savings account balances in financial
                                                                                        and the funds are intended to support them
     institutions will accrue only the percentage of
                                                                                        through college) and absorbing the associated
     interest that regular savings accounts earn at
                                                                                        long-term administrative costs. Currently, a
     the time of deposit (which currently is not a very
                                                                                        significant number of Native CSAs have less
     large amount). Earnings on the savings will be
                                                                                        than a few hundred dollars in them. Native
     low enough that they most likely will not impact
                                                                                        program administrators would be wise to do a
     the tax liability of the owner.
                                                                                        cost-benefit analysis to determine the potential
     Youths with CSA funds held in a regular                                            costs related to controlling the release of
     savings account at a financial institution may                                     the CSA funds over many years. If this is not
     benefit from a positive first-time banking                                         feasible, the tribe or Native-led nonprofit may
     experience. When CSA funds are held at a                                           choose to have parents own or control the
     financial institution, such as a bank or credit                                    accounts over the longer-term (for their child’s
     union, and the youths have positive interactions                                   benefit). Depending upon the age of the youth,
     with staff at the institution (at on site account                                  the tribe could also choose to determine if the
     openings and the making of deposits) they may                                      financial institution offers an account where the
     become more comfortable with mainstream                                            youth could control their funds — although this
     banking services, potentially becoming lifelong                                    would likely require some program controls.
     customers of such institutions. A positive
                                                                                        Should it affect the decision of where to hold
     banking relationship will also provide them
     with a federally insured account and enable                                        the accounts if the administering agency has
     them to resist predatory check cashing                                             established that a primary program goal is
     businesses and predatory lenders. Positive                                         to have the funds grow in the CSA as rapidly
     relationships with financial institutions may also                                 as possible and to be used specifically for
     guide youths toward eventually establishing                                        college savings? State 529 college savings
     positive credit histories — improving                                              plans primarily serve the savings goal of
     chances for obtaining conventional loans                                           supporting post-secondary education for the
     for life development purposes such as car                                          account beneficiary (the youth) by growing the
     purchase, homeownership, and small business                                        funds in an investment environment, at certain
     development.                                                                       investment rates (depending on the account
                                                                                        owner’s chosen level of risk). These accounts
Common Questions Regarding Choosing the                                                 also have desirable tax benefits for the account
Account Location of CSA Funds                                                           owner. The account balances in 529 plan
     If a concern of the CSA program administrator                                      accounts are likely to grow at a considerably
     is that parents might withdraw CSA funds for                                       higher rate than in a regular savings account

 For three examples of 529 plans that are reviewing how their state statues align with the federal legislation see:,
23, and

because the funds are invested in the stock                                     Since 2015, the author of this paper has conducted
          market — as opposed to being held at financial                                  research to explore which CSA plan or program
          institutions that traditionally offer low interest                              design options have negative impacts on the financial
          rates on savings accounts.                                                      aid assessments of Native students. As part of this
          However, there is earnings volatility associated                                research, the author surveyed eleven higher education
          with investing in a 529 plan due to stock market                                institutions.25 She soon discovered that there is a need
          fluctuations. Funds held in a 529 account                                       for more communication and information-sharing
          may lose as well as gain value depending                                        between CSA and financial aid administrators, as
          on the risk level of chosen fund allocations                                    well as other researchers and policymakers, since
          (chosen by account owners) and the economy,                                     the information she garnered was sometimes both
          meaning that the level of risk associated with                                  conflicting and confusing. While this research was
          the investments may impact the earnings.                                        limited, the body of data the author collected from
          Account owners are generally offered a variety                                  both public and private educational institutions raised
          of account allocation options when opening                                      concerns to her that agency-owned CSAs may more
          the accounts. They may also change the                                          negatively impact student financial aid assessments for
          level of risk they are comfortable with, over                                   students who have assets that will be included in the
          time, by adjusting chosen allocations over the                                  Expected Family Contribution (EFC) formula. However,
          lifetime of the account. There are some costs                                   the degree of impact may depend on a variety of
          associated with these accounts, which vary by                                   factors.
          plan. Prospective account administrators and                                    From a financial aid perspective, according to a
          owners would be wise to find and compare                                        2017 policy brief published by the Center for Social
          costs when choosing a 529 plan. Research is                                     Development at Washington University in St. Louis, in
          mostly unavailable as to the safety of financial                                regard to the Free Application for Federal Student Aid
          investments in the plans over time.24 However,                                  (FAFSA) and the EFC calculation, “assets do not affect
          after over twenty-plus years in existence, there                                the EFC for students whose parents have AGIs below
          is no evidence that, overall, 529 savings plans                                 $50,000 and who meet at least one of three other
          are not a safe and effective college savings tool                               qualifications: 1) someone in the parents’ household
          to grow college savings for youth.                                              received federal means-tested public assistance
                                                                                          within the previous two years; 2) the students’ parents
     POTENTIAL IMPACTS OF OWNING CSAS                                                     were eligible to file an IRS Form 1040A or 1040EZ (as
     ON THE FINANCIAL AID ASSESSMENTS OF                                                  of the 2018 tax year these forms have been virtually
     NATIVE YOUTHS                                                                        eliminated, and the information required for this
     Given rising tuition costs, it is important for Native                               calculation has been consolidated into form 1040); or
     families to understand the direct implications of                                    3) a parent is a dislocated worker. The students who
     how the ownership of a college savings account (or                                   qualify under the above qualifications, are granted a
     who is the owner or custodian of such an account)                                    simplified EFC formula (which disregards all parent and
     impacts financial aid assessments for Native students.                               student assets) or, if parent income is $25,000 or less,
     Financial aid assessments are made by the chosen                                     there is an automatic zero EFC (which sets the family
     educational institution. The financial aid assessment                                contribution to zero). Because of these provisions,
     formulas of many schools are complex and involve                                     assets have no impact on financial aid for the neediest
     factors such as 1) parent’s and/or child’s earnings                                  students.”26
     and assets, 2) available government need-based aid,                                  If, after any additional parent-owned asset exclusions,
     3) institutionally available need-based aid, 4) student                              a family still has assets that are not excluded by the
     work opportunities, 5) scholarships (need-based or                                   EFC formula, then parent-owned assets that are
     otherwise), 6) student loans, and 7) whether or not                                  counted towards the EFC are counted at a maximum
     the potential student is willing to make an early-in-life                            assessment rate of 5.64 percent. Assets owned by
     attendance commitment to the school aid is sought                                    students are counted at an assessment rate of at least
     from.                                                                                20 percent in the EFC, although universities that have

      Hannon, Simona M., Kevin B. Moore, Irina Stefanescu, and Max Schmeiser (2016). “Saving for College and Section 529 Plans,” FEDS Notes. Washington:

     Board of Governors of the Federal Reserve System, February 3,
      The author spoke with a university financial aid officer from Washington University in St. Louis (a private university), and surveyed ten additional schools by

     online survey with assistance from financial aid staff from the University of Oklahoma.
      See Clancy, M. & Beverly, S. (2017). Do Savings and Assets Reduce Need-Based Aid for Dependent Students? (CSD Policy Brief 17-10). St. Louis, MO:

     Washington University, Center for Social Development.

14   January 2020
private or institutional funds that may be included in the                         ADDITIONAL RESEARCH DATA ON THE
financial aid package, may utilize their own institutional                         POTENTIAL IMPACTS OF OWNING CSAS ON
methodology and, for example, assess student assets
                                                                                   STUDENTS’ FINANCIAL AID ASSESSMENTS
at a 25 percent assessment rate.27 The higher the
                                                                                   To learn more about how CSA program design options
total assets assessment rate percentage, the greater
                                                                                   could impact financial aid assessments, the author
the negative financial impact is on the student’s aid
                                                                                   designed a seven-question survey in 2017, with
                                                                                   guidance from an Assistant Director of the Office of
For a brief visual explanation, see the table: “CSA                                Student Financial Aid at The University of Oklahoma
Ownership Comparisons Relating to Financial Aid                                    Health Sciences Center. The survey was sent to a
Assessments,” below:                                                               distribution list of individuals in two groups, 1) the
                                                                                   Oklahoma Association of Student Financial Aid
             CSA Ownership Comparisons                                             Administrators, and 2) the Southwest Association of
         Relating to Financial Aid Assessments                                     Student Financial Aid Administrators in Oklahoma,
                                                                                   Texas, Arkansas, Louisiana, and New Mexico. The
   Type of        529 Savings Plans               CSAs Held in Savings             questions were administered via emails and Facebook
  Account:                                         Accounts at Banks               postings. Financial aid staff members from ten post-
                                                    or Credit Unions               secondary schools responded to the survey. Of the
Parent-owned   If CSA funds are held in a        CSA funds held in a               total respondents, eight worked at public universities,
account        529 savings account, with         non-agency owned bank             one at a private university, and one at a career technical
               the name of the parent on         account (such as when par-        school. Of the ten respondents, none claimed to use an
               the account as the account        ents open a bank account for      institutional methodology to assess parent or student
               owner, the funds in the           the child), with the student’s
               account are considered parent     Social Security number (SSN)
                                                                                   assets for the EFC.
               assets. If the family has         connected to that account, are    In the survey, the author posed the following question:
               assets that are not excluded      generally considered student
                                                                                   “If CSAs are held in a savings account at a bank or
               by the EFC formula, funds in      assets. If the family has as-
               a parent-owned 529 savings        sets that are not excluded by     credit union, having been opened by a parent as a
               account may be counted at an      the EFC formula, CSA funds        minor’s account for their child, are the assets in the
               assessment rate of up to 5.64     in bank accounts with the
               percent.28                        child’s SSN connected to the
                                                 accounts may be assessed
                                                 at a rate of 20 percent or
                                                 higher, depending on whether      27
                                                                                     Ibid. Also: Personal communication with a financial aid officer at Washington
                                                 or not the school uses an         University in St. Louis, on 16 March 2017. The author called this university’s
                                                 institutional methodology         financial aid office, as she is an alumnae, to ask how they counted assets in
                                                 when determining financial        CSAs held in non-agency-owned bank accounts. During the conversations,
                                                 assessments.                      the author learned that private schools, using an institutional methodology,
                                                                                   may assess student-owned accounts at a higher rate of 25%, rather than
                                                                                   the 20% found on The EFC Formula, 2017-2018 (
Agency-owned   If the school counts CSA funds    If the school counts CSA funds    sa/sites/default/files/2017-18-efc-formula.pdf). See Powell, Farran. “How
account        from agency-owned accounts        from agency-owned accounts        Expected Family Contribution for College is Calculated.” U.S. News and
                                                                                   World Report, 2 Aug. 2017.
               as scholarships, and if the       as scholarships, and if the
               family has assets that are not    family has assets that are not     See Clancy, M. & Beverly, S. (2017). Do Savings and Assets Reduce

                                                                                   Need-Based Aid for Dependent Students? (CSD Policy Brief 17-10). St.
               excluded by the EFC formula,      excluded by the EFC formula,
                                                                                   Louis, MO: Washington University, Center for Social Development. See also
               then the school may count the     then the school may count Does a 529 plan affect financial aid? at http://www.
               CSA assets as student-owned       the assets as student-owned
               assets which could be as-         assets which could be as-         29
                                                                                     See Clancy, M. & Beverly, S. (2017). Do Savings and Assets Reduce Need-
               sessed at a rate of 20 percent    sessed at a rate of 20 percent    Based Aid for Dependent Students? (CSD Policy Brief 17-10). St. Louis,
               (public universities) or higher   (public universities) or higher   MO: Washington University, Center for Social Development. In this Policy
               (a private university using an    (a private university, using an   Brief, the authors note that “CDA savings accumulated in agency-owned
               institutional methodology to      institutional methodology to      accounts (regardless of savings vehicle) typically do not affect need-based
               assess student assets may         assess student assets, may        aid because students and parents do not own the savings.”See Federal
                                                                                   Student Aid. 2017-2018 Federal Student Aid Handbook. Application and
               use as high as 25 percent).       assess at a higher rate, such
                                                                                   Verification Guide. Chapter 2-Filling Out the FAFSA, AVG-18 available at
               Some in the CSA field main-       as 25 percent).          “Qualified tuition
               tain that CSA assets held in                                        programs (QTPs, also known as section 529 plans because they are covered
               agency-owned 529 accounts                                           in section 529 of the IRS tax code) and Coverdell education savings accounts
               are not owned by the parents                                        are grouped together in the law as qualified education benefits and have the
               and students, but according                                         same treatment: they are an asset of the owner (not the beneficiary because
               to the 2017-2018 Federal                                            the owner can change the beneficiary at any time) except when the owner is
               Student Aid Handbook, agen-                                         a dependent student, in which case they are an asset of the parent. When the
                                                                                   owner is some other person (including a non-custodial parent), distributions
               cy-owned 529 assets may be
                                                                                   from these plans to the student count as untaxed income, as “money
               counted as student assets.29                                        received.” The University of Oklahoma Financial Aid Services shared this
                                                                                   information with the author from the Application and Verification Guide.

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